Helios and Matheson's "board has unanimously adopted a resolution authorizing, approving, declaring advisable and recommending to the company's stockholders for their approval an amendment to the company's certificate of incorporation to effect a reverse split of the outstanding and treasury shares of the company's common stock in a ratio of 1 share-for-2 shares up to a ratio of 1 share-for-500 shares," the company said in a document filed with the Securities and Exchange Commission.

The company hasn't set a date for the meeting, but even it acknowledged that this effort sounds like déjÀ vu. It first pitched a similar plan in September, then twicedelayed holding a vote on it before withdrawing the plan amid objections from investors.

Helios and Matheson officials are pressing the plan again, because they feel they have to. The Nasdaq national market warned the company last month that it planned to delist Helios and Matheson's stock for failing to meet its $1-a-share price requirement. The company appealed that decision, it confirmed in the regulatory document. But its appeal will be heard by the Nasdaq on January 31, and it needs to be able to show regulators that it has a plan to get its stock price back above the $1 threshold.

"We believe that a reverse stock split could increase the market price of our common stock sufficient to satisfy [Nasdaq's] minimum bid price requirement in the near term," the company said in the statement.

The company already reverse split its stock in July

That "near term" line is important to note. Because this effort to do a reverse split doesn't just call to mind last fall's aborted effort to do the same thing. It also resembles the actual reverse split the company actually effected in July - and the results of that weren't good. Indeed, it's what led directly to Helios and Matheson being in the position it's in today, risking delisting.

Helios and Matheson's stock price peaked in October 2017 at nearly $39 a share - or $9,715 a share if you take into account the effect of the reverse split. After that, it fell in fits and starts as the company's losses ballooned, thanks to the growing number of consumers taking advantage of MoviePass's all-you-can-eat $10 movie ticket subscription plan, and as it flooded the market with new shares, which it sold to replenish the cash it was rapidly burning through.

By May, Helios and Matheson's stock had fallen below $1 a share. After the company's stock spent 30 days trading for pennies, the Nasdaq sent Helios and Matheson a warning letter that it faced delisting if it didn't get its shares above the $1 threshold on a sustained basis.

So, Helios and Matheson announced that it wanted permission to do a reverse split, offering a range of possible split ratios of between one new share for every two old ones to one new share for every 250 old ones. At the same shareholder meeting, it sought permission to increase its number of shares outstanding from 500 million to 5 billion. With the company nearing the limit of its authorized share count, the expansion would give it the ability to sell billions of new shares to continue to fund its business to the point where it could ostensibly narrow its losses and boost its share price.

Officials took advantage of the leeway to sell more stock

But if investors passed both proposals, they would give Farnsworth and company lots of new latitude to flood the market with additional shares. That's because while a reverse split would reduce the number of shares Helios and Matheson had already issued, it wouldn't affect the total number of shares it could potentially issue - the 5 billion number of authorized shares would stay the same regardless of the ratio by which the company reverse split its stock.

As it turned out, that's just what happened. Investors passed both measures, and Farnsworth and his team took advantage of their new powers. They reverse split the stock by the maximum ratio allowed under their proposal - 250 to 1 - and then promptly started selling new shares. In less than two months, the company share count went from less than 2 million immediately after the split to nearly 1.4 billion.

And the company's stock? Within a week, it had fallen from $22.50 to below $1 a share. Within two weeks of the reverse split, it was below 10 cents a share. Lately, it's been trading at closer to a penny a share.

You can understand, then, why, when Helios and Matheson in September proposed a second split, investors resisted it. The results of the past one had been disastrous. The company had destroyed gobs of shareholder value.

Helios and Matheson is warning of more dilution ahead

But investors had another reason to be wary of another split. While the company was seeking to decrease its share count, it wasn't planning to decrease its authorized share count or to stop selling new shares. Indeed, it told investors that it likely would continue to sell shares to raise money to fund its business.

Shareholders rejected that idea. But Helios and Matheson's executives don't seem to have learned anything from the experience. The reverse-split plan they proposed Friday is basically the same idea, just warmed over. It would give the company the power to reverse split the stock by as much as a 500-to-1 ratio, but it wouldn't reduce the authorized share count or limit sales of new shares. So it would be freed up to issue up to nearly 5 billion shares of the newly split stock.

And that's not just a theoretical possibility; Helios and Matheson is again stating that it likely will resort to selling new shares.

"Although MoviePass recently has implemented significant cost cutting measures ... the company believes it will continue to need to raise capital to fund MoviePass until MoviePass becomes cash flow positive or profitable (of which there is no assurance)," Helios and Matheson said in the regulatory filing, adding that it could sell shares or issue debt.

Its share count now stands at 2 billion shares. That an increase of nearly 119,000% just since its first reverse split. Pretty much every time it's been freed up to issue more shares, it's done that - and existing investors have paid the price.

Investors don't seem to have mellowed since November

The thing is, even Helios and Matheson, which announced this week plans to spin off MoviePass, acknowledged in the regulatory filing that the reverse-split effort is something of a Hail Mary. The Nasdaq could delist its stock even if it believed shareholders would pass the measure. Thanks to the decline of its stock price, Helios and Matheson now isn't meeting another listings standard.

It's market capitalization is now about $26 million, which is significantly below Nasdaq's $35 million requirement. And if that wasn't enough, the market regulators could decide that enough is enough, and that Helios and Matheson shouldn't have the freedom a listing on the Nasdaq would give the company to further dilute shareholders.

Its possible that investors have calmed down and have mellowed their attitudes about a reverse split since Helios and Matheson backed away from the previous effort. But probably not.